Budgeting in the information age: a fresh approach

Abstract

For hospitality organizations to compete successfully in the emerging information age, with its emphasis on innovation, quality and speed, it is suggested that they must adopt more flexible, responsive and empowered management structures. However, if such developments are to prove effective, it is essential that hospitality organizations also overhaul their accounting systems, most of which were designed to support the previous industrial era’s focus on volume and productivity. Indeed, there is a concern that traditional budgeting systems – with their typical bureaucratic encouragement of internally-focused, department-centred cost minimization – may present a significant barrier to effective change. It is proposed instead that a fresh approach to the objectives of budgeting is needed, involving “alternative steering mechanisms” that promote empowerment, flexibility and knowledge-sharing. This suggestion is supported by evidence from an American hotel where such a fresh approach to budgeting has been developing, “matching” its more progressive management structure

Improving hotel budgetary practice—A positive theory model

“…Hospitality-applied research since 1998 has related to specific aspects of budgeting and sometimes been part of a broader project (Harris and Brander-Brown, 1998;Graham and Harris, 1999;Brander-Brown and Atkinson, 2001;Sharma, 2002;Subramaniam et al, 2002;Mia and Patiar, 2002;Yuen, 2004Yuen, , 2006.…”

Strategy implementation: a role for the balanced scorecard?

“…Thus there would appear to be a significant “gap” in the knowledge base at a time when the commercial environment is exhibiting significant changes. The transformation from the industrial to the information age is signalled by increasingly sophisticated customers and management practices, escalating globalisation, more prevalent and subtle product differentiation, and an emphasis on intellectual capital and enhanced employee empowerment (Johnson and Kaplan, 1987; Eccles, 1991; Kaplan and Norton, 1992; Hope and Hope, 1997; Huckstein and Duboff, 1999; Brander Brown and Atkinson, 2001). In this new world order successful strategy implementation becomes ever more important.…”

Activity-Based Costing in the Hospitality Industry: Evidence From Greece

“…The topics of the previews research cover the whole field of cost and management accounting. As far as hotels are concerned, there are studies on strategic management accounting (Collier & Gregory, 1995), the structure of cost accounting system (Brignall, 1997;Brignall, Fitzgerald, Silvestro, & Johnson, 1991), the general and relative importance of the knowledge in accounting techniques in hotel management (Damitio & Schmidgall, 1990), the use of cost accounting information (Downie, 1997;Mia & Patiar, 2001), the causes and consequences of implementing yield management (Edgar, 1997;Jarvis, Lindh, & Jones, 1998), the activity-based modeling of costumer profitability analysis (Noone & Griffin, 1997, the roles of and participation on controllers in hotel management (Burgess, 1996;Gipson 1998Gipson , 2002Pickup, 1985;Subramaniam, McManus, & Mia, 2002), the links between managerial accounting and corporate management (Mongiello & Harris, 2006), the pricing practices and their relationship to cost accounting (Pellinen, 2003), the acceptance and usage of Uniform Systems of Accounts for the Lodging Industry (USALI; Kwansa & Schmidgall, 1999), and the budget system characteristics and practices (Brader Brown & Atkinson, 2001;Brothertone, 2004;Jones, 1998;Schmidgall, Borchgrevink, & Begnum, 1996;Schmidgall & Ninemeier, 1987;Sharma, 2002;Winata & Mia, 2005).…”